Analysis on the Present Situation and Countermeasures of Earnings Management

Abstract

Earnings management of listed companies has become a very common headache for listed companies in China, and it is also a problem of great concern to the public. Within the scope permitted by accounting standards and relevant laws and regulations, a considerable number of people purposefully planned to realize the expected earnings by choosing accounting policies, changing accounting estimates or arranging transactions and events, and they influence the decision-making of accounting information users through financial reports, thus enabling the company to maximize its own earnings. Paying attention to enterprise earnings management has become the consensus of every decision maker. This paper analyzes the present situation and motivation caused by earnings management, and it puts forward several governance measures of earnings management aiming at the present situation, aiming at making listed companies use earnings management reasonably, avoiding overuse or overuse of earnings management, and showing the public a real business situation.